U.S. petroleum major Chevron Corp. moved into a new neighborhood in June -- the bustling, azure oil fields of the Brazilian South Atlantic.

Chevron first pumped oil from its Frade field, 120 kilometers off the coast of Espirito Santo state, in June. The newly installed Frade -- an FPSO, or floating production, storage and offloading vessel -- joined counterparts belonging to Brazilian state-run energy giant Petrobras (PBR), which operates the nearby Roncador field.

"We're certainly not alone out here," said Chevron's Jeff Post, facilities engineering manager for the Frade. Looming in the distance are Petrobras' monstrous P-54 platform and its smaller cousin, the FPSO Brasil.

Chevron hopes its new outpost will lay the foundation for an even greater presence in Brazil, and further partnerships with offshore neighbor Petrobras. Petrobras holds a 30% stake in Frade, which Chevron operates with a 51.7% share. The remaining stake is held by Frade Japao Petroleo Ltda.

"You always see this issue when you do a country entry. You want to get that first project operational there," George Kirkland, Chevron's executive vice president for global upstream and gas.

"It's a good basin; it's a good place to be," said Kirkland, who as of next year will also be the California-based company's vice chairman.

Chevron hopes its success getting the Frade field launched will show the company can deliver and is ready for more, perhaps even playing a role in the recently discovered offshore fields in the subsalt region.

The so-called subsalt discoveries were made under a thick layer of salt in the Santos Basin off the coast of Sao Paulo and Rio de Janeiro states. The oil lies under more than 2,000 meters of water and a further 5,000 meters under sand, rock and a shifting layer of salt.

While Chevron doesn't hold any acreage in the promising frontier, the company could bid for partnerships with Petrobras under the new production-sharing regime proposed by Brazil's government. Chevron already has a strong relationship with Petrobras, which will be lead operator of government-controlled subsalt blocks.

For now, Chevron will concentrate on ramping up output at Frade and the stakes it holds in four other Brazilian offshore fields.

Papa-Terra and Maromba -- where Chevron holds 37.5% and 30% stakes, respectively -- are operated by Petrobras. Papa-Terra, once seen as the most advanced project, has been delayed by high costs. Petrobras canceled tenders for a platform and FPSO slated to operate at the field.

Maromba, however, has generated excitement because of subsalt potential. A pilot production system is under evaluation to glean more information about the reservoirs present.

Chevron also holds 20% stakes in the Atlanta and Oliva fields, which are operated by Royal Dutch Shell PLC (RDSA, RDSB). Shell holds a 40% stake, while Petrobras also retains 40%.

Meanwhile, Chevron continues the long, arduous task of ramping up output at Frade, which should reach peak production of 90,000 barrels a day in about two years. Recoverable reserves at the field are estimated at between 200 million and 300 million barrels of heavy crude.

"We're all excited about first oil, but that's just the start," said Post.

A work crew of about 120 -- down from 240 before the first oil was pumped -- is bringing the FPSO's topside systems online. The first cargo of crude will be delivered this month.

Also in October, the third production well should be hooked up, Post said. It's currently being drilled by Transocean's S-706 rig, which was hired specifically to drill Frade's 12 horizontal production and seven water injection wells. The first water injection well is expected to be ready in November.

Currently, two production wells are connected to the FPSO, producing about 15,000 barrels a day. The company expects to end 2009 with output of 30,000 barrels a day.